The funded status of the 100 largest corporate defined benefit plans was 72.4% at the end of August, up from 70.9% at the end of July, according to Milliman's monthly report.
Assets increased $11 billion last month, while liabilities dropped $23 billion, mainly from a seven-basis-point increase in the discount rate, marking just the second month this year that the discount rate has increased.
The asset increase was a result of a 1.02% investment return for the month. Over the last 12 months, the cumulative asset return is 6.38%. However, in that same time period, the pension deficit of those 100 plans has grown by $262 billion as the funded status has dropped from 83.8% and the discount rate has fallen from 4.96%.
Total pension liabilities decreased to $1.81 trillion in August while pension assets increased to an aggregate $1.31 trillion.
“After months of precipitous decline, it's good to see the deficit moving in the right direction, however modestly,” said John Ehrhardt, principal and consulting actuary at Milliman and co-author of the study, in a news release. “We're going to need continued interest-rate increases, above average asset performance, and significant employer contributions in order to dig out of this hole.”